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2.3 Exports of Karnataka

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2.3 Exports of Karnataka STRATEGIES for Promotion of Exports from Karnataka Study on Strategies for Promotion of Exports from Karnataka TABLE OF CONTENTS Strategies for Promotion of Exports from Karnataka - Summary Chapter No. - 1 Chapter No. - 5 1 Preamble, Objectives, Scope & Methodology 17 5 Strategies for Export Promotion 63 A Export Promotion measures 67 Chapter No. - 2 B Incentives and Concessions under Industrial Policy 2014-19 71 2 Overview of Export Performance of Karnataka 18 C Review and Monitoring Mechanism 74 2.1 Karnataka Economy & Sectoral Shares of GSDP at Current Prices 18 D Appointment of Export Commissioner for the State 75 2.2 Natural Resources of Karnataka 19 E Strategies Proposed 78 2.3 Exports of Karnataka 21 F Shelf of Projects identied for the growth and development of 83 2.4 Products having Export Potential from Karnataka 26 Exports during the 12th plan period 2.5 Projection in the Growth of Value of Exports of Karnataka by 2019 28 G Areas and Goods for Anti Dumping and Tariff Protection 86 Chapter No. - 2 Exhibit 3 Current Status of Infrastructure & Bottlenecks 29 Illustrative view of the export process in India 87 3.1 Roads 29 3.2 Railways 31 3.3 Seaports 32 3.4 Airports 35 3.5 Inland Container Depot (ICD) 36 3.6 Container Freight Stations (CFS) 37 3.7 Special Economic Zone (SEZ) 37 3.8 Foreign Direct Investment in Karnataka 40 Chapter No. - 4 4 Sectoral Strategies for Exports 41 4.1 Core Market Strategy 41 4.2 Sector / Product Specic Strategy 41 Study on Strategies for Promotion of Exports from Karnataka 1. EXECUTIVE SUMMARY The Foreign Trade Policy of Government of India 2009-2014 sets out a goal of doubling India's export of goods & services to achieve the objective of doubling India's share in global trade by the end of 2020. To achieve this goal, all States, including Karnataka are required to play a signicant role to contribute to the growth of exports. Analysis of Karnataka's basket of exports in 9 product groups provides a background for projecting exports. Such projections made with reference to growth rates and potential for the various products groups. The average value of exports for three year period covering 2011-12, 2012-13 and 2013-14 was Rs. 2.56 lakh crores. The sector-wise v ariations in the growth patterns was observed at a low of 4% (iron ore & minerals) and a high of 18% (in the case of electronics and computer software) in the corresponding period. Accordingly, projections need to be levelled with reference to the growth patterns between commodities. The projections of exports from Karnataka with reference to Rs. 2.56 lakh crores (past three years average) for period 2015 to 2019 have been made. The export is projected to reach Rs. 5.92 lakh crores in 2019 from the present level of Rs. 2.56 lakh crores. These gures have been stacked up taking in to account expected growth in each of the product groups in the coming 5 years. Karnataka's Gross State Domestic Product (GSDP) at constant prices (2004-05) which was Rs 2,86,410 crores in 2011-12 has increased to Rs. 2,96,658 crores in 2012-13 and stood at Rs. 3,11,628 crores in 2013-14. The level of per capita GSDP at constant prices which was Rs. 42,218 in 2011-12 has increased to Rs.43,075 crores in 2012-13 and stood at Rs.44,857 in 2013-14 Karnataka's Gross State Domestic Product (GSDP) at current prices which was Rs 4,63,243 crores in 2011-12 has increased to Rs. 5,24,502 crores in 2012-13 and stood at Rs. 5,93,811 crores in 2013-14. The level of per capita GSDP at current prices which was Rs. 77,491 in 2011-12 has increased to Rs. 86,864 crores in 2012-13 and stood at Rs. 97,386 in 2013-14 Service Sector constitutes a major share in the State GSDP at 61.40 %, Industry contributes 24.50% & Agriculture contributes 14.10%. Karnataka is endowed with rich agricultural, horticultural and mineral sources viz. iron ore, limestone, gold, granite & manganese etc. To achieve the growth of exports from Karnataka, strategies and interventions would be required from the stakeholders including Government. Fig 1.1: Commodity wise current exports 01 02 Study on Strategies for Promotion of Exports from Karnataka Figure 1.3 illustrates the building block approach used to stack up incremental exports for each of the product group through Product-Market matrix Fig 1.3: Illustration of stack up of exports in a product group Diversificaon: Enter new markets with new products (Ex: Product Innovaon Centres for Europe and Emerging markets) Product Development: Improving exports by creang new products for exisng markets (Ex: Gaming Apps for Russia) Market Development: Improving exports by venturing into new markets with current export commodies (Ex: Soware exports to Ghana and Chile) Penetraon: Improving exports in exisng markets with current export commodies (Ex: Soware products in USA) 1. Approach to build competitive and effective strategies Product-Market approach is being applied to estimate growth rates for exports of each of the product groups. The existing and potential markets for each of the product groups have been These strategies are supported by effective action plans to address aggressively by building identied and estimated import scenarios have been forecasted for these countries, based on on existing strengths and mitigating weaknesses in the State's infrastructure and trade secondary data available across many sources. promotion. Soft and hard interventions are also planned to keep the State equipped to tap emerging opportunities and effectively face forecasted threats. For each of the product groups, separate strategies have been built for existing and new markets. The approach used is to clearly identify in which of the markets the State is required to These strategies basically evolve from the Product-Market Development Plan suggested by aggressively harvest the advantages and market linkages and where pioneering efforts are Department of Industries & Commerce. (Refer Fig 1.4) needed to develop the trade. (Refer Fig 1.2) Fig 1.2: Product-Market grid approach to build growth strategies s oup oduct Gr Pr Fig 1.4: Product-Market grid suggested by Department of Industry and Commerce 03 04 Based on this strategic approach the projections for exports of each of the key and important Table 1.2 product groups are made. (Refer Table 1.1) Sector Growth Rate Basis Table 1.1 : Projections of exports by Product groups Electronics, Computer Software 18% NASSCOM projections for the industry Gems & Jewellery 5% Gems & Jewellery Export Promotion Council (all India) (in Rs. crores) Incremental Exports from each of the strategy Petroleum & Petroleum Products 13% Trends in Petroleum imports of target countries for Indian exports 3 Years Readymade Garments 13% Average Growth rates of exports of readymade garments from Average of Incremental Sl 2018-19 New Market New Product Karnataka of 11% and a small incremental of 2% to provide Sector-wise Commodities actual exports Exports Penetration Diversification No. Projections Development Development for penetration of new markets (2011-12 Planned till 2013-14) Engineering Products 46% Karnataka's YoY growth rate has exceeded 36% in the last 3 years. 1 Electronics, Computer Software 380857 156553 224304 156553 23483 23483 20782 New initiatives as envisaged in the Strategy Paper are conservatively expected to take this figure to 46% 2 Gems & Jewellery 50889 24129 26760 14477 4826 4826 2630 Basic Chemicals, Pharma 21% Export growth on YoY basis has been around 12%. New initiatives 3 Petroleum & Petroleum Products 63173 30908 32264 21636 4636 4636 1345 and Plastic Goods like Ayurvedic medicine exports contribute to incremental exports 4 Readymade Garments 17357 8238 9120 6178 1236 1236 465 Agri and Processed Food Products 22% The YoY growth has been between 15 - 18%. Emphasis on Geographical Indicators and additional measures like 5 Engineering Products 34170 12936 21233 12936 3234 3234 1824 Coffee processing hub contribute to an additional 4 - 7% 6 Basic Chemicals, 16949 8078 8871 6463 1616 796 0 Iron ore etc 0% No growth is projected in this area since the regulatory Pharmaceuticals & Plastic goods framework is unclear 7 Agri. & Processed food products 15804 7168 8636 5734 1434 717 745 Misc and others 6% The rate of growth is presently around 5%. With the impetus including coffee products, provided a small increment of 1% has been factored cashew, spices, gherkins, rose, onions, marine products Overall 18% The overall growth derived is around 17 - 18% 8 Iron Ore & Minerals 1344 1203 141 84 58 0 0 (Incl. granites) 9 Misc and Others 11497 6661 4836 0 0 0 0 Mapping of incremental growth to specic strategies Total 592039 255874 336164 224062 40522 38927 27792 The differential between the 3 years actual exports (11-12 to 13-14) is Rs. 336,165 crores (i.e. 592039-255874). The contribution of each strategic initiative is as follows: The incremental exports coming from each product group are projected in relation to certain market indicators such as growth rates projected by trade bodies, reports on key indices of Penetration strategy: This strategy focuses on increasing the export penetration of existing performance of the emerging markets, projected GDP growth rates of key countries and products in existing markets. The YoY growth should be achieved if the sector wise trends are contribution of their imports to their GDP. The base exports considered for growth are taken as maintained without any special interventions. This amount is projected at Rs. 224,062 crores. average of three years exports, from 2011 till 2014.
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